Tremendous money and Türkiye behind the Orbán cabinet’s thirst for Russian oil?

Why are Orbán and his team so determined to cling to Russian oil? An expert reveals the truth, with money playing a key role. Another key factor may be the Hungary-Türkiye relationship.

It is now relatively well known that within the European Union, only Slovakia and Hungary continue to purchase oil from Russia. The landlocked Czech Republic and Austria are expected to cease buying Russian oil entirely this year, yet none of these countries show signs of collapse. So why, then, do Orbán’s government insist on maintaining their reliance on Russian oil? According to an expert, the answer lies largely in the vast sums of money involved, along with a little-known diplomatic element lurking behind the scenes.

Orbán cabinet: severing ties with Russian oil would be catastrophic

From 2025 onwards, only Hungary and Slovakia will still be purchasing Russian oil, which is why Prime Ministers Fico and Orbán fiercely defend this position at every opportunity. Since the start of the Russian invasion, the EU has contemplated banning these transactions (and has already done so for maritime shipments). However, Budapest and Bratislava have so far enjoyed exemptions, as they receive oil via the landlocked Friendship pipeline.

Last week, it emerged that even former US President Trump expressed frustration after some discussions over how NATO member states could be inadvertently funding Russia’s war machine through oil purchases. Nevertheless, a friendly chat with the Hungarian Prime Minister appeared to soothe his concerns. It seems Orbán convinced the White House that Hungary cannot yet afford to give up Russian oil.

• Trump: Hungary should not be blamed for its dependence on Russian oil

The government constantly asserts that switching oil sources would lead to soaring petrol prices, something nobody wants. They claim there is no alternative supply capable of meeting the quantities refined by MOL (Hungary’s national oil company). Additionally, technical issues arise because MOL can currently only refine Russian Ural-type oil; converting to other types would require massive investments, which would ultimately hurt motorists’ wallets. However, an expert offers a more nuanced perspective on these claims.

Hungarian-Croatian oil relations are heavily strained

Energy expert József Balogh argues that the Friendship pipeline is not the only option. Contrary to government assertions, the Adriatic pipeline could supply ample oil if capacity were secured early and in large volumes, and if the MOL-INA dispute between Hungary and Croatia did not sour their relationship.

The crux of the conflict is a Croatian court ruling that MOL’s CEO Zsolt Hernádi secured control of Croatian oil company INA through a €10 million bribe with the help of former Croatian Prime Minister Ivo Sanader. Sanader served almost 10 years in prison for this and other crimes before his release this July, while Hernádi remains barred from entering Schengen countries due to a Croatian arrest warrant.

• Hungarian MOL-Croatian INA war continues: MOL CEO Hernádi bribed Croatian PM with €10M?

Is Russian oil really cheap?

Balogh agrees with the government that Russian oil is cheaper than alternatives (as is Russian gas), but acquiring it is politically delicate. He claims MOL knows exactly how to transition away from Russian oil at its refineries but “pretends otherwise.” He also points out that Hungarian interests control the refinery in Rijeka, Croatia, which processes non-Russian oil, meaning the knowledge and technology to switch exist.

“You can be sure they have fully planned the transition for refineries in Százhalombatta and Bratislava. They’re prepared, they know exactly what to do, they’re very professional. They’re just not being allowed,” Balogh told Szeretlek Magyarország.

Why is it so hard to break free from Russian oil?

Balogh is straightforward: huge sums of money are at stake. Russian Ural type oil is cheaper than the Western Brent grade, and much of the price difference flows into Hungary’s budget, with a smaller portion going to MOL. This represents hundreds of billions of forints annually.

He also revealed that intermediary firms operating in the market “make hefty profits for someone.”

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Finally, he noted that when NATO countries’ purchases of Russian oil are criticised in Washington, Hungary and Slovakia are not the real targets (which is why non-EU NATO states are usually named). The oil imports of these two Central European nations are dwarfed by those of Türkiye, NATO’s second most powerful military, but Western powers barely mention this lucrative business.

Balogh does not mention it, but there have been suggestions that Hungary’s veto of Swedish and Finnish NATO accession was linked to Turkish demands, as President Erdogan had certain conditions for Stockholm. Thus, Orbán may have played a shielding role in this dispute, given his well-known rapport with Erdogan. Alongside financial incentives, this defensive and defiant alliance could also explain Hungary’s firm stance on Russian oil.

Balogh added, however, that if Brussels and Washington ever push hard enough to make it unbearable, MOL could switch suppliers immediately, as could the government.

What’s the latest on Russian gas?

Answering Szeretlek Magyarország, Balogh indicated that Russian gas poses no problems. If it did, other supplies such as Azeri gas could flow along the TurkStream pipeline, and options from Romania, Austria, or Croatia remain open. The closest alternative is Croatia’s Krk LNG terminal, but that opportunity is likely affected by the MOL-INA dispute.

Again, Balogh admitted that in terms of price, no source beats Russia, which is a powerful argument for the Hungarian government in contentious situations.

Update: PM Orbán resists

The Prime Minister, attending the unofficial EU summit in Copenhagen, stated that ending the purchase of Russian gas and oil “goes completely against Hungary’s interests, and I must say no to that. This is what they call a cage fight here. On top of that, I’m under attack from all sides—some of my colleagues disagree with me, the Commission officials are against me, and even the opposition at home opposes me. So, it’s going to be a tough and challenging day, but we will fight through it.”